Foreign divestment: the missing piece in international business scholarship

Shyamala Sethuram () and Ajai Gaur ()
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Shyamala Sethuram: Baruch College
Ajai Gaur: Rutgers University

Journal of International Business Studies, 2024, vol. 55, issue 8, No 6, 1038-1047

Abstract: Abstract As international business (IB) scholars seek to invigorate the field and steer it away from what some deem a “research coma” resulting from a narrowing scope, the significance of foreign divestment (FD) has once again been relegated amidst other pressing topics. We advocate for elevating FD to the same level of importance as foreign direct investment (FDI). Despite emerging a decade after seminal contributions on FDI, FD has suffered from a notable lack of attention in IB research and educational curricula. However, FD, like FDI, is a common practice among firms and is gaining prominence in light of recent disruptions such as geopolitical conflicts, economic decoupling, digital transformation, and growing skepticism towards globalization. We identify two main setbacks to overcome: the persistent view of FD as merely a misstep in firms' internationalization strategies, and its perception as a subordinate aspect within broader themes of internationalization, including emerging topics such as deglobalization and decoupling. As we elaborate in this commentary, delving into FD at a more granular level can uncover disruptive spillovers that require pushing the boundaries of extant theorizing in IB; neglecting FD leaves the field incomplete and hampers its ability to fully grasp the complexities of global business dynamics.

Keywords: Foreign divestment; De-internationalization; Exit; Deglobalization; Decoupling; Reshoring (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s41267-024-00727-1

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